Hard on the heels of yesterday’s apology from the Welsh Labour Government’s First Minister – Carwyn Jones – after the land-deal fiasco that cost taxpayers’ millions – today the Auditor General for Wales has highlighted fundamental “weaknesses” in the Welsh Government’s case for taking Cardiff Airport into public ownership.
The airport was bought from its Spanish owners in 2013 for £55,300,000 – a sum criticised at the time for being far too much for what was a run-down airport which caters for less that 30 flights a day.
The auditor-general , Huw Vaughan Thomas says the Welsh Labour Government didn’t “set out clearly enough its investment objectives or its consideration of alternative options, risks and benefits.”
His report says that – although the Welsh Government gave “some consideration” to other options – acquisition was the preferred option from the outset .
In coming up with a cash offer – airport was valued as a “public asset” – which “applied different assumptions to the commercial valuations” . However the Welsh Government eventually accepted a “commercial valuation” based on specific assumptions about the airport’s overall commercial performance .
Other problems in the acquisition are also noted by the Auditor General. He says “the need for external finance is greater than forecast at the time of the acquisition and progress against the overall business plan has been slower than previously forecast.”
Today’s report also reveals that there is “no formal plan to realise wider benefits from the acquisition of the airport“.
Huw Vaughan Thomas, Auditor General for Wales, said today “Turning the Airport around is proving more challenging than the Welsh Government expected at the time of the acquisition, despite some positive developments. ”
Penarth’s Assembly Member Andrew RT Davies (Conservative South Wales Central) says the revelations call into question Labour’s “economic judgement” .
He said “This is yet another example of the Welsh Labour Government’s stunning failure to safeguard taxpayers’ money, with tens of millions of pounds going to waste – despite clear, professional advice which should have told them that the price they were prepared to pay for the airport was over the odds.”
“At a time when councils, hospitals and schools are facing a financial squeeze we have two clear examples of Labour wasting huge sums of money. It’s unforgivable and quite rightly communities across the Vale of Glamorgan will be asking some serious questions of the Welsh Labour leadership.”